Life Insurance Corporation of India के अकाउंट के लिये नोट

Mar 31, 2025

15. Provisions, Contingent Liabilities and Contingent Assets:

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic
benefits will be required to settle an obligation. Contingent Liabilities (other than policies), if material, are disclosed by way
of notes. Contingent Assets are not recognized or disclosed in the financial statements.

16. Receipts and Payments Account:

Receipts and Payments Account is prepared and reported using the Direct Method in accordance with Chapter-2 Section-I
(2.a.i) of the Master Circular on Actuarial, Finance and Investment Functions of Insurers IRDAI/ACTL/CIR/MISC/80/05/2024
dated 17^th May, 2024.

17. Taxation:

a) Direct Tax: Provision for income tax is made in accordance with the provisions of Section 44 of the Income Tax Act,
1961 read with Rules contained in the First Schedule and other relevant provisions of the Income Tax Act, 1961 as
applicable for life insurance business.

b) Indirect Tax: The Corporation claims credit of goods and services tax on input services, which are set off against
goods and services tax on output services.

Unutilized credits towards goods and services tax on input services are carried forward under ‘Schedule 12 -Advances
and Other Assets’ in the Balance Sheet, wherever there is reasonable certainty of utilization.

18. Borrowing Costs:

Borrowing cost includes interest, commission/brokerage on deposits and exchange differences arising from foreign
currency borrowings to the extent they are regarded as adjustment to interest cost.

19. Earnings per share:

Basic earnings per share is computed by dividing the net profit or loss after tax attributable to equity shareholders by
weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by
dividing the net profit or loss after tax attributable to the equity shareholders by the weighted average number of equity
shares outstanding during the period adjusted for the effect of all dilutive potential equity shares.

20. Segmental Reporting:

a) Identification of Segments:

Based on the primary segments identified under Insurance Regulatory and Development Authority of India (Actuarial,
Finance and Investment Functions of Insurers) Regulations, 2024 (‘the regulations’) read with Accounting Standard 17
on “segmental reporting” notified under section 133 of the Companies Act 2013 and rules there under, the Corporation
has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the
Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely
Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life
(Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non
Participating Variable Individual, Non Participating Health Individual, Non Participating Unit Linked (Life, Pension
and Health) and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various
geographical segments.

b) Basis of allocation of expenditure to various segments of business:

Operating Expenses relating to life insurance business after adjusting for expenses attributable to Shareholders
Account is allocated to various lines of business such as Non-Linked Participating, Non-Linked Non-Participating,
General Annuities, Pensions, Health, Group Business and Unit Linked Business on the basis of:

a. Expenses which are directly identifiable to the respective lines of business have been recognized in the respective
lines of business on actual basis, and

b. Expenses which are not directly identifiable to the specific lines of business are allocated out of the common pool

on the following basis or a combination of these:

i. Number of policies

ii. Total premium income

iii. Sum assured

Allocation of expenses among various lines of business is based on the approved expense policy of the

Corporation.

21. Leases:

a) Operating Lease: Leases where the lessor effectively retains substantially all the risks and benefits of ownership
over the lease term are classified as operating lease. Operating lease rentals are recognized as an expense over the
lease period on a straight-line basis.

Where the Corporation is the lessor, Assets subject to operating leases are included in fixed assets.Lease income
is recognized in the Revenue/Profit and Loss Account on a straight-line basis over the lease term. Cost, including
depreciation are recognised as expense in the Revenue/ Profit and Loss Account.

b) Finance Lease: Leases under which the Corporation assumes substantially all the risks and the rewards of ownership
of the asset are classified as finance lease. Such leased asset acquired is capitalised at fair value of the asset or
present value of the minimum lease rental payment at the inception of the lease, whichever is lower.

22. Funds for future appropriations:

For Non- linked Participating business, the balance in the funds for future appropriations account represents funds, the
allocation of which, either to participating ‘Policy Holders’ or to ‘Shareholders’, has not been determined at the Balance
Sheet date. Transfers to and from the fund reflect the excess or deficit of income over expenses and appropriations in each
accounting period arising in the Corporation’s ‘Policy holders’ fund. In respect of participating policies any allocation to the
policyholder would also give rise to a shareholder transfer in the required proportion.

The fund for future appropriations held in the Unit-Linked funds, represents surplus that has arisen from lapsed policies
unlikely to be revived. This surplus is required to be held within the ‘policyholders’ fund till the point at which the policyholders’
can no longer revive their policy.

23. Unclaimed amount of policyholders:

Assets held for unclaimed amount of policyholders are created and maintained in accordance with the requirement of
Master circular on Unclaimed amount of Policyholders IRDA/F&A/CIR/Misc/282/ 11/2020 dated November 17, 2020 and
Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers)
Regulations, 2024 as amended from time to time:

a) Assets of unclaimed amounts of policyholders are disclosed in Schedule 12 “Advances and Other Assets”, forming
part of Balance Sheet. Corresponding income on unclaimed assets is shown under “Interest, Dividend & Rent- Gross”
in Revenue Account.

b) Income earned on unclaimed amount of policyholders is accreted to respective unclaimed fund and is accounted for
on an accrual basis.

c) Amounts remaining unclaimed for a period of 10 years along with all respective accretions to the fund are deposited
into the Senior Citizen Welfare Fund (SCWF) as per requirement of IRDAI regulations.

24. Income arising from Available Solvency Margin (ASM) fund:

Income arising from Available Solvency Margin (ASM) fund, which is part of Non-Participating fund, is treated as Income
of the respective accounting period under Non- Participating business. Consequently amount (net of Tax) pertaining to
the accretion on the ASM has been transferred from Non- Participating to Shareholders Fund along with equal amount of
Assets.

3. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation’s Life Insurance Business consists of linked and non-linked business under Individual and Group contracts.
The non-linked business consists of Participating Assurance /Annuity / Pension policies and Non-participating Assurance
/ Annuity /Pension / Individual Health policies and Group policies written under non-participating assurances. The linked
business consists of Non-participating Assurance / Pension / Individual Health policies with a very small proportion of
linked assurance business written under Group contracts. Some of these policies have riders attached to them such as
Critical Illness, Premium Waiver Benefit, Term Assurance and Accident Benefit including Accidental Death & Disability
Benefit.

The Valuation liability for Individual and Group policies in our books as at 31^st March, 2025, has been calculated actuarially
for each policy by using Prospective Gross Premium Method of valuation or unexpired premium reserve as applicable. It is
ensured that the reserve for each policy is at least equal to the Guaranteed Surrender Value or Special Surrender Value,
whichever is higher. It is also ensured that negative reserve is set to zero while arriving at the reserve under a policy.

The unit liability in respect of Linked business is taken as the total Net Asset Value of the units as on the date of valuation.
The non-unit liability under the linked business is calculated using the discounted cash flow method.

The liabilities are calculated based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses,
inflation and bonuses wherever applicable. The best estimate assumptions are calculated based on the past experience
analysis and expected future experience. The valuation assumptions are arrived at after factoring in margins on the best
estimate assumptions as per the Regulations and Actuarial Practice Standards.

The liability for Group Cash Accumulation schemes has been taken as the fund value of all such schemes as on the date
of valuation. The liability in respect of One Year Renewable Group Term Assurance schemes has been arrived at as
unearned risk premium based on period up to next Annual Renewal Date.

The valuation rates of interest used vary according to the type of plan and ranges from 5.65% p.a. to 7.38% p.a. depending
on the nature and term of the underlying assets and liabilities. Bonus rate assumptions have been aligned to be consistent
with the valuation rates of interest.

The mortality rates used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian
Individual Annuitants Mortality (2012-15) Ultimate Table and Morbidity rates are based on the Critical Illness Base Table
(CIBT 93, UK) /Reinsurer’s incidence rates.

The expense assumption for valuation was arrived at either as a percentage of premiums or as per policy or a combination
of these. The renewal per policy expenses used for valuing individual business varies according to the type of Plan and
status of the policy and with an appropriate assumption for expense inflation. Renewal Premium related expenses in
respect of individual business include GST on premium, wherever applicable, depending on the type of Plan. While valuing
Participating policies, the allowance for applicable taxation and allocation of surplus to shareholders has been made by
appropriately rating up future Reversionary Bonuses reserved for the remaining duration of the contract.

Additionally, reserves have been provided for liability in respect of Premium Waiver Benefit, Double Accident Benefit
including Permanent Disability Benefit, revival of paid up policies, reinstatement of policies which have not acquired
paid up value, immediate increase in expenses in case the office is closed for new business, AIDS/HIV, Incurred But Not
Reported deaths (IBNR), Catastrophe etc. Further, in case of Linked Plans, where there is a guarantee at maturity, cost
of such guarantee has been arrived at using stochastic methods. For Bima Account II, the cost of interest guarantee has
been provided for. For Plans where there are options which can be exercised by the policyholders, the most onerous option
has been taken for valuing these options. Fund for Future Appropriations (FFA) for both Non-Linked and Linked lines of
business has been provided for in the respective lines of Business.

The Board of the Corporation had approved in Financial Year 2021-22, bifurcation of the Single fund into separate Par
and Non-Par funds as mandated under Section 24 of LIC Act, 1956, and the Surplus Distribution Policy required under
the amended Section 28 of LIC Act, 1956. The Surplus Distribution Policy mandates the surplus distribution pattern for
Par policies as 95:5 for the financial year 2021-22, 92.5:7.5 for the financial years 2022-23 and 2023-24, and 90:10 from
financial year 2024-25 onwards and 0:100 for Non-Par policies from financial year 2021-22 onwards.

4. Basis of allocation of investments and income thereon between Policyholders’ Account and Shareholders’
Account:

Income accruing on investments held in Policyholders’ and Shareholders’ funds have been taken to the respective funds.

The investible surplus, arising out of operations and income on Policyholders’ investments, was invested in Policyholders’
account. The accretions to Shareholders’ fund during the year is invested in Shareholders’ fund.

C) Employees Pension Scheme 1995-Liability:

Projected Unit Credit Method where the benefits payable are valued considering the service up to the valuation date
and increases in salaries up to the date of exit. The value of such benefits as on the valuation date has been arrived
at by discounting the amount of such projected benefits.

The principal assumptions are the (1) Discount Rate & (2) Salary Increase.

13. Derivative Contracts:

The Corporation offers guaranteed products wherein the policyholders are assured of a fixed rate of return for premiums
to be received in future. These premiums are likely to be received over a longer tenure and the guaranteed rate of return
is fixed at the beginning of the policy term. Any fall in interest rates would mean that each incremental investment of the
Corporation would earn a lower rate of return. Accordingly the Corporation manages the Interest Rate Risk in accordance
with the IRDAI circular no. IRDA/F&I/INV/CIR/138/06/2014 dated 11 June, 2014 (the IRDAI Circular on Interest Rate
Derivatives) and IRDAI Investment Master Circular issued in May 2024 which allows insurers to deal in rupee interest rate
derivatives such as Forward Rate Agreements ("FRAs"), Interest Rate Swaps ("IRS") and Exchange Traded Interest Rate
Futures ("IRF").

The Corporation has in place a derivative policy approved by Board which covers various aspects that apply to the
functioning of the derivative transactions undertaken to substantiate the hedge strategy to mitigate the interest rate risk,
thereby managing the volatility of returns from future fixed income investment, due to variations in market interest rates.

During the year the Corporation has entered into Forward Rate Agreements (FRA) transactions, as part of Corporation''s
Board approved Hedging strategy, to hedge the interest rate sensitivity for highly probable forecasted transactions as
permitted by the IRDAI circular on Interest Rate Derivatives.

Forward Rate Agreement derivative contracts are over-the counter (OTC) transactions wherein, the Corporation lock-in the
yield on the government bond at a specified future date at a price decided at the time of the FRA contract with an objective
to lock in the price of an interest bearing security at a future date.

Derivatives (FRA) are undertaken by Corporation solely for the purpose of hedging interest rate risks on account of following
forecasted transactions: a) Reinvestment of maturity proceeds of existing fixed income investments. b) Investment of
interest income receivable; and c) Expected policy premium income receivable on insurance contracts which are already
underwritten in Life, Pension & Annuity business.

The amount that was removed from Hedge Fluctuation Reserve account during the year ended March 31,2025
in respect of forecasted transaction for which hedge accounting had previously been used, but is no longer
expected to occur is Nil (Previous year Nil). The cash flows from the hedges are expected to occur over the
outstanding tenure of underlying policy liabilities and will accordingly flow to the Revenue Account.

I. Qualitative Disclosures on risk exposure in Fixed Income Derivatives:

Overview of business and processes:

a) Fixed Income Derivative Hedging instruments

Derivatives are financial instruments whose characteristics are derived from the underlying assets, or from
interest and exchange rates or indices. These include forward rate agreements, interest rate swaps and interest
rate futures.

The Corporation has during the year, as part of its Hedging strategy, entered into Forward Rate Agreements
(FRA) transactions to hedge the interest rate sensitivity for highly probable forecasted transactions as permitted
by the IRDAI circular on Interest Rate Derivatives. The Corporation does not engage in derivative transactions
for speculative purpose.

b) Derivative policy/process and Hedge effectiveness assessment:

The Corporation has well defined Board approved Derivative Policy and Process document setting out the
strategic objectives, regulatory and operational framework and risks associated with interest rate derivatives
along with having measurement, monitoring processes and controls thereof. The accounting policy has been
clearly laid out for ensuring a process of periodic effectiveness assessment and accounting.

The Corporation has clearly identified roles and responsibilities to ensure independence and accountability
through the investment decision, trade execution, to settlement accounting and periodic reporting and audit of
the Interest Rate Derivative exposures. The risk management framework for the Interest Rate Derivatives are
monitored by the Risk management Committee.

c) Scope and nature of risk identification, risk measurement, and risk monitoring:

The Derivative and related Policies as approved by the Board sets appropriate market limits such as sensitivity
limits and value-at-risk limits for exposures in Interest rate derivatives. All financial risks of the derivative portfolio
are measured and monitored on periodic basis.

d) Quantitative disclosure on risk exposure in Forward Rate Agreement

A hedge is deemed effective, if it has a high statistical correlation between the change in value of the hedged item
and the hedging instrument (FRA). Gains or losses arising from hedge ineffectiveness, if any, are recognised in
the Revenue Account.

The tenure of the hedging instrument may be less than or equal to the tenure of underlying hedged asset/liability.
Interest Rate Derivative - Counterparty exposure

10) Expenses of Management:

The Expenses of Management are in accordance with the Insurance Regulatory and Development Authority of India
(Expenses of Management, including Commission, of Insurers) Regulation 2024.

11) Disclosure on presentation of segmental Reporting:

Based on the primary segments identified under Insurance Regulatory and Development Authority of India (Actuarial,
Finance and Investment Functions of Insurers) Regulations, 2024 (‘the regulations’) read with Accounting Standard 17 on
“segmental reporting” notified under section 133 of the Companies Act, 2013 and rules there under, the Corporation has
classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation
has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life
Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group),
Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable Individual,
Non Participating Health individual, Non Participating Unit Linked (Life , Pension and Health) and Capital Redemption
and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments. (Annexure - I on
segmental reporting).

12) Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius, United Kingdom and Gift City (Gandhinagar) are of non integral nature. The
Revenue Account items are translated at the average exchange rate and Balance Sheet items at closing rate. Revaluation
Exchange difference which was charged to Revenue Account till the year i.e. 2010-11 is now accumulated in Foreign
Exchange Reserve under Schedule 6A: Insurance Reserves (Policyholders) and Schedule 6: Reserve and Surplus
(shareholders).

16) Provision for tree-look period:

Provision for free-look period of '' 29.58 crores and '' 28.02 crores as at year end March 31, 2025 and March 31, 2024
respectively has been made on the basis of actual premium refunded during the month of April 2025 and April 2024
respectively. The provision is made with an assumption that all refund of premium during the month of April 2025 and April
2024 pertained to the policies completed on or before March 31,2025 and March 31,2024 respectively.

17) Progress of implementation of Ind AS:

The Gap Analysis on implementation of Indian Accounting Standards (Ind AS) was completed and submitted to the
Regulator. The Corporation is progressing on the preparation of Ind AS compliant Proforma Financial Statements as
required by the Regulator.

The Audit Committee and Board of Directors have been updated regularly in this matter.

18) Security under debt extended to two companies amounting to '' 628.60 Crore is executed partially and is under due
process (Previous Year under two companies, amounting to '' 628.60 Crore).

20) Pursuant to Regulatory approval received by the Corporation, an amount of '' 9,280.37 crore pertaining to additional
contribution due to increase in family pension is being amortised over 20 quarters commencing from Q3 of the
FY 2023-24 amounting to '' 464.02 crore per quarter. Accordingly, an amount of '' 464.02 crore has been charged to
Revenue Account for the quarter ended March 31,2025. The balance amount of '' 6,496.25 crore shall be amortised over
the subsequent quarters upto Q2 of the FY 2028-29.

21) Pursuant to Regulatory approval received by the Corporation, an amount of '' 7,230.09 crore in Par segment pertaining
to excess Expenses of Management for the FY 2022-23 is being replenished from Shareholders’ account in equal annual
installments not exceeding three, commencing from Q1 of the FY 2024-2025. Accordingly, an amount of '' 602.51 crore
has been replenished from the Shareholders’ account for the quarter ended March 31, 2025. The balance amount of
'' 4,820.05 crore shall be replenished from Shareholders’ account over the subsequent quarters up to Q4 of the
FY 2026-27.

22) Pursuant to Regulatory approval received by the Corporation, an amount of '' 5,477.10 crore towards additional pension
liability pertaining to Par segment is being charged to the Shareholders account over a period not exceeding three years
commencing from the FY 2024-2025. Accordingly, an amount of '' 456.42 crore has been charged to Shareholders’ account
during the quarter ended March 31, 2025. The balance amount of '' 3,651.42 crore shall be charged to Shareholders’
account over the subsequent quarters up to Q4 of the FY 2026-27.

23) Impairment of Investments:

The impairment in value of investments other than temporary diminution has been assessed for the period and accordingly
impairment provisions have been provided.

Provision/(reversal) for impairment loss recognized in the Revenue Account under the head Provision for diminution in the
value of investments (net).

30) The Board of Directors has recommended a final dividend of '' 12 /- per equity share of '' 10 /- each for the Financial Year
2024-25, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation.

31) Transfer of unclaimed dividend and corresponding shares to Investor Education and Protection Fund (IEPF):

Transfer of Unclaimed dividend and corresponding shares to Investor Education and Protection Fund: Section 28C (5) of
the Life Insurance Corporation Act, 1956 provides that the amount remaining unclaimed and unpaid for a period of seven
years from the date it became due for payment in the Unpaid Dividend Account shall be transferred to the IEPF established
under sub-section (1) of section 125 of the Companies Act, 2013.

In terms of Section 28 C (6) of Life Insurance Corporation Act, 1956, all shares in respect of which dividend has not been
paid or claimed for seven consecutive years or more shall be transferred by the Corporation to the Investor Education and
Protection Fund.

32) Figures of the previous period/year have been regrouped wherever necessary to conform to the current periods’
presentation.

33) Disclosure requirements as per Corporate Governance Guidelines:

i) A description of the risk management architecture:

LIC has robust Enterprise Risk Management (ERM) framework to conduct business in an orderly fashion taking into
account the risks faced by the Corporation and controlling its business effectively with defined responsibilities and
adequate risk management procedures.

Board of Directors provide the overall guidance on Risk Management function which includes providing necessary
oversight on key risks and measures, approving the Enterprise Risk Management Policy, Cyber security policy, Risk
Appetite statement, Asset Liability Management (ALM) Policy and Business Continuity Plan (BCP) of the Corporation
on an annual basis.

In line with the IRDAI Guidelines, Corporation has constituted the Risk Management Committee of the Board (RMCB).
The RMCB looks after the risk management governance structure, reviews the risk management framework, risk
appetite and the risk mitigation plans for significant risks, identifies strategic risks emanating from changes in business
environment and regulations, oversees the compliance to regulatory requirements, all matters related to Asset Liability
Management, IT Security policy on annual basis, reviews regular updates on business continuity in line with the
Corporation’s Business Continuity Plan, solvency position of the Corporation, fraud monitoring, etc. on regular basis.
Further, all important matters which, in the view of the RMCB, require further strategic intervention from the Board are
brought to its knowledge in its meeting on a periodic basis.

An internal independent Committee, named as Committee of Executives on Risk Management (CERM) and Asset
Liability Management Committee (ALCO) has been constituted with Heads of key functional departments. Chief Risk
Officer (CRO) acts as the custodian of Enterprise Risk Management framework and guides the implementation of
the Enterprise Risk Management. Recommendations of the Committee of Executives on Risk Management & Asset
Liability Management are reported to RMCB by the CRO. CERM & ALCO supports the RMCB by supervising major
functions like establishing Enterprise Risk Management Policy, ALM Policy, Risk Appetite Statement, MIS for risk
reporting/risk control, key risks arising from strategic initiatives and changes in business environment or regulations,
risk assessment highlighting significant risks and risk mitigation plans thereof, review of operating risk environment
including Business Continuity Plan, review of solvency position of the Corporation on a regular basis, review of risk
related to IT security and Fraud Monitoring. A consolidated report on various issues discussed by the CERM & ALCO
and action taken thereon are reported to RMCB on quarterly basis.

---

Mar 31, 2024

15. Provisions, Contingent Liabilities and Contingent Assets:

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities (other than policies), if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

16. Receipts and Payments Account:

Receipts and Payments Account is prepared and reported using the Direct Method in accordance with Para 2.2 of the Master Circular on Preparation of Financial Statements and Filing of Returns of Life Insurance Business Ref No. IRDA/ F&A/Cir/232/12/2013 dated December 11,2013.

17. Taxation:

a) Direct Tax: Provision for income tax is made in accordance with the provisions of Section 44 of the Income Tax Act, 1961 read with Rules contained in the First Schedule and other relevant provisions of the Income Tax Act, 1961 as applicable for life insurance business.

b) Indirect Tax: The Corporation claims credit of goods and services tax on input services, which are set off against goods and services tax on output services.

Unutilized credits towards goods and services tax on input services are carried forward under ‘Schedule 12 -Advances and Other Assets’ in the Balance Sheet, wherever there is reasonable certainty of utilization.

18. Borrowing Costs:

Borrowing costs include interest, commission/brokerage on deposits and exchange differences arising from foreign currency borrowings to the extent they are regarded as adjustment to interest cost.

19. Earnings per share:

Basic earnings per share is computed by dividing the net profit or loss after tax attributable to equity shareholders by weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

20. Segmental Reporting:

a) Identification of Segments:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors’ report of insurance Companies) regulations 2002 (‘the regulations’) read with Accounting Standard 17 on “segmental reporting” notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments.

b) Basis of allocation of expenditure to various segments of business:

Operating Expenses relating to life insurance business after adjusting for expenses attributable to Shareholders Account and are allocated to various lines of Business such as Non-Linked Participating, Non-Linked Non-Participating, General Annuities, Pensions, Health, Group Business and Unit Linked Business on the basis of:

a. Expenses which are directly identifiable to the respective lines of business have been allocated to these lines of business on actual basis, and

b. Other expenses which are not directly identifiable to the respective lines of business are allocated out of the

common pool on the following basis or a combination of these:

i. Number of policies

ii. Total premium income

iii. Sum assured

Allocation of expenses among various lines of business is based on the approved expense policy of the

Corporation.

21. Leases:

a) Operating Lease: Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating lease. Operating lease rentals are recognized as an expense over the lease period on a straight-line basis.

Where the Corporation is the lessor, Assets subject to operating leases are included in fixed assets.Lease income is recognized in the Revenue/Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as expenses in the Revenue/ Profit and Loss Account.

b) Finance Lease: Leases under which the Corporation assumes substantially all the risks and the rewards of ownership of the asset are classified as finance lease. Such leased asset acquired are capitalised at fair value of the asset or present value of the minimum lease rental payment at the inception of the lease, whichever is lower.

22. Funds for future appropriations:

For Non-linked Participating business, the balance in the funds for future appropriations account represents funds, the allocation of which, either to participating ‘Policy Holders’ or to ‘Shareholders’, has not been determined at the Balance Sheet date. Transfers to and from the fund reflect the excess or deficit of income over expenses and appropriations in each accounting period arising in the Corporation’s ‘Policy holders’ fund. In respect of participating policies any allocation to the policyholder would also give rise to a shareholder transfer in the required proportion.

The fund for future appropriations held in the Unit-Linked funds, represents surplus that has arisen from lapsed policies unlikely to be revived. This surplus is required to be held within the ‘policyholders’ fund till the point at which the policyholders’ can no longer revive their policy.

23. Unclaimed amount of policyholders:

Assets held for unclaimed amount of policyholders are created and maintained in accordance with the requirement of Master circular on Unclaimed amount of Policyholders IRDA/F&A/CIR/Misc/282/ 11/2020 dated November 17, 2020 and Investment Regulations, 2016 as amended from time to time:

a) Assets of unclaimed amounts of policyholders are disclosed in Schedule 12 “Advances and Other Assets”, forming part of Balance Sheet. Corresponding income on unclaimed assets is shown under “Interest, Dividend & Rent- Gross” in Revenue Account.

b) Income earned on unclaimed amount of policyholders is accreted to respective unclaimed fund and is accounted for on an accrual basis.

c) Amounts remaining unclaimed for a period of 10 years along with all respective accretions to the fund are deposited into the Senior Citizen Welfare Fund (SCWF) as per requirement of IRDAI regulations.

24. Income arising from Available Solvency Margin (ASM) fund:

Income arising from Available Solvency Margin (ASM) fund, which is part of Non-Participating fund, is treated as Income of the respective accounting period under Non-Participating business. Consequently amount (net of Tax) pertaining to the accretion on the ASM has been transferred from Non-Participating to Shareholders Fund along with equal amount of Assets.

3. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation’s Life Insurance Business consists of linked and non-linked business under Individual and Group contracts. The non-linked business consists of Participating Assurance /Annuity / Pension policies and Non-participating Assurance / Annuity /Pension / Individual Health policies and Group policies written under non-participating assurances. The linked business consists of Non-participating Assurance / Pension / Individual Health policies with a very small proportion of linked assurance business written under Group contracts. Some of these policies have riders attached to them such as Critical Illness, Premium Waiver Benefit, Term Assurance and Accident Benefit including Accidental Death & Disability Benefit.

The Valuation liability for Individual and Group policies in our books as at 31^st March, 2024, has been calculated actuarially for each policy by using Prospective Gross Premium Method of valuation. It is ensured that the reserve for each policy is at least equal to the Guaranteed Surrender Value or Special Surrender Value, whichever is higher. It is also ensured that negative reserve is set to zero while arriving at the reserve under a policy.

The unit liability in respect of Linked business is taken as the total Net Asset Value of the units as on the date of valuation. The non-unit liability under the linked business is calculated using the discounted cash flow method. The liabilities are calculated based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses, inflation and bonuses wherever applicable. The liability for Group Cash Accumulation schemes has been taken as the fund value of all such schemes as at 31^st March, 2024. The liability in respect of One Year Renewable Group Term Assurance schemes has been arrived at as unearned risk premium based on period up to next Annual Renewal Date.

The valuation rates of interest used vary according to the type of plan and ranges from 5.20% to 7.38% p.a. depending on the nature and term of the underlying assets and liabilities. Bonus rate assumptions have been aligned to be consistent with the valuation rates of interest.

The mortality rates used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian Individual Annuitant Mortality (2012-15) Ultimate Table adjusted to reflect expected experience and allowance for margin for adverse deviation. Morbidity rates are based on the Critical Illness Base Table (CIBT 93, UK) /Reinsurer’s incidence rates, suitably modified for our use with margins included for prudence.

The expense assumption for valuation was arrived at either as a percentage of premiums or as per policy or a combination of these. The renewal per policy expenses used for valuing individual business varies according to the type of Plan and status of the policy and with an appropriate assumption for expense inflation. Renewal Premium related expenses in respect of individual business include GST on premium, wherever applicable, depending on the type of Plan. While valuing Participating policies, the allowance for applicable taxation and allocation of surplus to shareholders has been made by appropriately rating up future Reversionary Bonuses reserved for the balance duration of the contract.

Additionally, reserves have been provided for liability in respect of Premium Waiver Benefit, Double Accident Benefit including Permanent Disability Benefit, revival of paid up policies, reinstatement of policies which have not acquired paid up value, immediate increase in expenses in case the office is closed for new business, AIDS/HIV, Incurred But Not Reported deaths (IBNR), catastrophe etc.. The assumptions used for arriving at the reserves for above mentioned items were determined based on a prudent assessment of the future experiences for the outstanding durations of the policies as at the date of valuation allowing for margin for adverse deviation.

Further, in case of Linked Plans, where there is a guarantee at maturity, cost of such guarantee has been arrived at using stochastic methods. For Bima Account II, the cost of interest guarantee has been provided. For Plans where there are options which can be exercised by the policyholders, the most onerous option has been taken for valuing these options. Fund for Future Appropriations (FFA) for both Non Linked and Linked lines of business has been provided in respective lines of Business.

The Board of the Corporation had approved in Financial Year 2021-22, bifurcation of the Single fund into separate Par and Non-Par funds as mandated under Section 24 of LIC Act, 1956, and the Surplus Distribution Policy required under the amended Section 28 of LIC Act, 1956.

The Surplus Distribution Policy mandates the surplus distribution pattern for Par policies as 95:5 for the financial year 2021-22, 92.5:7.5 for the financial years 2022-23 and 2023-24, and 90:10 from financial year 2024-25 onwards and 0:100 for Non-Par policies from financial year 2021-22 onwards.

4. Basis of allocation of investments and income thereon between Policyholders’ Account and Shareholders’ Account:

Income accruing on investments held in Policyholders’ and Shareholders’ funds have been taken to the respective funds.

The investible surplus, arising out of operations and income on Policyholders’ investments, was invested in Policyholders’ account. The accretions to shareholders’ fund during the year is invested in shareholders’ fund.

10) Expenses of Management:

The Expenses of Management are in accordance with the Regulation of IRDAI (Expenses of Management of Insurer transacting life insurance business) Regulation 2023.

11) Disclosure on presentation of segmental Reporting:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors’ report of insurance Companies) regulations 2002 (‘the regulations’) read with Accounting Standard 17 on “segmental reporting” notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments. (Annexure - I on segmental reporting).

12) Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius and United Kingdom are of non integral nature. The Revenue Account items are translated at the average exchange rate and Balance Sheet items at closing rate. Revaluation Exchange difference which was charged to Revenue Account till the year i.e. 2010-11 is now accumulated in Foreign Exchange Reserve under Schedule 6A: Insurance Reserves (Policyholders) and Schedule 6: Reserve and surplus (shareholders).

20) The liability on account of additional contribution of '' 11,124.66 crore arising due to fresh pension option to employees in the financial year 2019-20 is being provided over a period of five years commencing from the financial year 2019-20 in accordance with the requisite approval dated July 6, 2020. Accordingly, the remaining amount of '' 2,224.94 crore has been charged to Revenue Account for the year ended March 31,2024.

21) Out of the total additional contribution of '' 11,959.52 crore towards increase in family pension due to amendment in LIC (Employees) Pension Rules 1995, the Corporation had already provided an amountof '' 2,679.15 crore during the quarter ended September 30, 2023. Pursuant to the approval received by the Corporation during the quarter ended December 31, 2023, the remaining liability of '' 9,280.37 crore is being amortised over 20 quarters commencing from Q3 of the FY 2023-24 amounting to '' 464.02 crore per quarter. Accordingly, an amount of '' 464.02 crore has been charged to Revenue Account for the quarter ended March 31,2024. The balance amount of '' 8,352.33 crore shall be amortised over the subsequent quarters upto Q2 of the FY 2028-29.

22) Additional pension liability due to wage revision to employees of the Corporation amounts to '' 6,306.29 crore. Out of this, '' 829.19 crore has been recognized in the FY 2023-2024 in the respective segments and balance amount of '' 5,477.10 crore pertaining to Par segment shall be charged to the Shareholders account over a period of not exceeding three years commencing from the FY 2024-2025. The Corporation has obtained the requisite approval.

23) An amount of '' 7,230.09 crore in Par segment pertaining to excess Expenses of Management for the FY 2022-23 shall be replenished from Shareholders’ account in equal annual instalments not exceeding three, commencing from Q1 of the FY 2024-2025. The Corporation has obtained the requisite approval.

24) During Q4 of the FY 2023-24, based on management assessment, excess provision of income tax amounting to '' 7,692.59 crore pertaining to earlier years has been reversed and included under the head - “Other Income”.

25) Other income includes interest amounting to '' 6,257.98 crore (Previous Year '' 6,626.98 crore) received during the current financial year towards refund of income tax for the earlier financial years.

33) Wage Revision:

Wage revision of the employees of the Corporation is done every five years and the last wage revision has become due on August 01,2022. The provision for the same has been made on the estimated basis as at March 31,2024.

34) Basis of revaluation of investment property:

Revaluation of investment (rented out) properties is being carried out once in three years as per IRDAI guidelines. The revaluation of properties has been carried out in the financial year 2022-23. The basis adopted for revaluation of property is as under:

• The valuation of investment property has been carried out by Rent Capitalization Method considering the market rent.

• Revaluation of investment properties having land alone without any building/structure has been revalued as per current market value.

• The Revaluation Reserve as at March 31,2024 amounts to '' 14,839.06 Crore and as at March 31,2023 amounts to '' 14,835.23 Crore.

35) The Corporation declared and paid an interim dividend of '' 4/- per equity share of '' 10/- each during the Financial Year 2023-24. The Board of Directors has recommended a final dividend of '' 6 /- per equity share of '' 10 /- each for the Financial Year 2023-24, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation.

36) Transfer of unclaimed dividend and corresponding shares to Investor Education and Protection Fund:

Transfer of Unclaimed dividend and corresponding shares to Investor Education and Protection Fund: Section 28C (5) of the Life Insurance Corporation Act, 1956 provides that the amount remaining unclaimed and unpaid for a period of seven years from the date it became due for payment in the Unpaid Dividend Account shall be transferred to the Investor Education and Protection Fund established under sub-section (1) of section 125 of the Companies Act, 2013.

In terms of Section 28 C (6) of Life Insurance Corporation Act, 1956, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Corporation to the Investor Education and Protection Fund.

38) Disclosure requirements as per Corporate Governance Guidelines

i) A description of the risk management architecture:

LIC has robust Enterprise Risk Management (ERM) framework to conduct business in an orderly fashion taking into account the risks faced by the Corporation and controlling its business effectively with defined responsibilities and adequate risk management procedures.

Board of Directors provide the overall guidance on Risk Management function which includes providing necessary oversight on key risks and measures, approving the Enterprise Risk Management Policy, Cyber security policy, Risk Appetite statement, Asset Liability Management (ALM) Policy and Business Continuity Plan (BCP) of the Corporation on an annual basis.

In line with the IRDAI Guidelines, Corporation has constituted the Risk Management Committee of the Board (RMCB). The RMCB looks after the risk management governance structure, reviews the risk management framework, risk appetite and the risk mitigation plans for significant risks, identifies strategic risks emanating from changes in business environment and regulations, oversees the compliance to regulatory requirements, all matters related to Asset Liability Management, IT Security policy on annual basis, reviews regular updates on business continuity in line with the Corporation’s Business Continuity Plan, solvency position of the Corporation, fraud monitoring, etc. on regular basis. Further, all important matters which, in the view of the RMCB, require further strategic intervention from the Board are brought to its knowledge in its meeting on a periodic basis.

An Internal Independent Committee, named as Committee of Executives on Risk Management (CERM) and Asset Liability Management Committee (ALCO) has been constituted with Heads of key functional departments. Chief Risk Officer (CRO) acts as the custodian of Enterprise Risk Management framework and guides the implementation of the Enterprise Risk Management. Recommendations of the Committee of Executives on Risk Management & Asset Liability Management are reported to RMCB by the CRO. CERM & ALCO supports the RMCB by supervising major functions like establishing Enterprise Risk Management Policy, ALM Policy, Risk Appetite Statement, MIS for risk reporting/risk control, key risks arising from strategic initiatives and changes in business environment or regulations, risk assessment highlighting significant risks and risk mitigation plans thereof, review of operating risk environment including Business Continuity Plan, review of solvency position of the Corporation on a regular basis, review of risk related to IT security and Fraud Monitoring. A consolidated report on various issues discussed by the CERM & ALCO and action taken thereon are reported to RMCB on quarterly basis.

1. CERTIFICATE OF REGISTRATION

The Corporation has obtained the Certificate of Renewal of Registration from the Insurance Regulatory and Development Authority of India and the same continues to be valid. The Corporation has complied with the terms and conditions of the registration stipulated by the Authority.

2. STATUTORY DUES

The Corporation confirms that all the dues payable to the statutory authorities have been duly paid within due dates, except those which are being contested or disclosed under contingent liabilities in the notes to accounts forming part of the financial statements.

3. SHAREHOLDING PATTERN

The Corporation confirms that the shareholding pattern is with in accordance with the requirements of the Insurance Act, 1938 as amended by the Insurance Laws (Amendment), 2015 and the Life Insurance Corporation Act, 1956.

The detailed shareholding pattern is disclosed in Schedule 5A, forming part of financial statements. Further, the shareholding pattern is in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and is available on the website of the Corporation.

4. investment OUTSIDE INDIA

The Corporation has not, directly or indirectly, invested outside India from the funds of the holders of policies, issued in India during the year.

5. solvency margin

The Corporation has adequate assets to maintain its solvency margins as required by the Insurance Act, 1938 during the period as stipulated under Section 64VA of the said Act and the IRDAI (Assets, Liabilities and Solvency Margin of Life Insurance Business) Regulations, 2016.

6. valuation of assets

The values of all the assets have been reviewed on the date of Balance-Sheet for any possible impairment provision/provision for non performing asset and that in the opinion of the Management, the assets set forth in the Balance-Sheet are shown in the aggregate at amounts not exceeding their realizable or market value under the headings “Loans”, “Investments”, “Agents balances”, “Outstanding Premiums”, “Interest, Dividends and Rents outstanding”, “Interest, Dividends and Rents accruing but not due”, “Amounts due from other persons or Bodies carrying on insurance business”, “Bills Receivable”, “Sundry Debtors”, “Cash” and the several items specified under “Other Accounts”.

7. APPLICATION AND INvESTMENTS OF LIFE INSURANCE FUNDS

No part of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) as amended by the Insurance Laws (Amendment) Act 2015, relating to the application and investment of the Life Insurance Funds.

8. overall risk exposure and mitigation strategies

Life Insurance Corporation has robust Enterprise Risk Management framework to conduct its business in an orderly fashion, taking into account the risks faced by the Corporation and ensuring adequate risk management procedures.

Risk management is defined as the process under which Corporation addresses risks associated with the Corporation’s operations by identifying, measuring and mitigating such risks. Risk Management encompasses understanding of all the factors and the extent to which they can be threats to success. The process also endeavors to bring about the Risk culture in the organization so that the employees feel the importance of putting Risk management system in place and each employee involves himself in appropriately addressing the concerned risks.

Board of Directors provide the overall guidance on Risk Management function, which includes providing necessary oversight on key risks and measures, approving the Enterprise Risk Management Policy, Risk Appetite statement, ALM Policy and Business Continuity Plan of the Corporation on an annual basis.

In line with the IRDAI Corporate Governance Regulations, 2016, Risk Management Committee of the Board (RMCB) is formed.

An internal committee, named as Committee of Executives on Risk Management (CERM) and Asset Liability Committee (ALCO) has been constituted consisting of Heads of key functional departments, to monitor the implementation of Enterprise Risk Management policy and Asset Liability Policy respectively.

Three Lines of Defence Model for Risk Management of the Corporation:

First Line of Defence - Head of Departments (HODs at Central Office) i.e. the Risk Owners. The Departments would assume ownership of respective risks.

Second Line of Defence - ERM Department

The department monitors implementation of effective risk management practices and supports the risk owners in Assessment and Reporting risk related information to RMC & top management.

Third Line of Defence - Internal Audit, Statutory Audit, System Audit, Concurrent Audit and Inspection function which are giving assurance to top Management and Board for effective conduct of procedures, systems and processes.

Key Risk Management Tools:

Risk Appetite Statements:

Risk appetite is the amount and type of risk that the Corporation is willing to take in order to meet its strategic objectives. A range of appetites exist for different risks and which may change over time. The Risk appetite statements are reviewed on an annual basis by the Risk Management Committee of the Board (RMCB) and approved by the Board. The risks are monitored vis-a-vis the limits set by the Corporation and reporting is done to the Top Management and to the Risk Management Committee of the Board.

Risk Registers:

Corporation maintains Risk Register at each functional level wherein risks relating to that function along with the control measures are documented. These risks identified in the registers are assessed on half-yearly basis. The Risk register is updated every quarter for inclusion of emerging risks to ensure that all the emerging risks are being identified and taken care of.

Incident Management & Operational Loss database:

The Incident Management aims to implement procedures for identification, monitoring, mitigation and reporting of incidents (including frauds) within the Corporation. Incident Management process is defined to ensure any operational losses including frauds, regulatory / policy breaches and potential losses are systematically identified, reported, escalated, analysed and resolved to prevent recurrence in future.

Top Risks and Key Risk Indicators:

The top risks for the Corporation are identified by analysing the materiality / impact of key risks faced by the Corporation. The assessment of Key Risk Indicators is done every quarter to ascertain RAG status The Top Risks and associated Key Risk Indicators are updated on annual basis with separate benchmarks and threshold limits.

Dash Board:

Dash Board is available in the ERM Module which is accessible to Top management for viewing the Risk Reports. The Risk Registers are placed before CERM & RMC by Chief Risk Officer of ERM department.

The mitigation strategies for various risks under Enterprise Risk Management framework:

LIC is a premier institutional investor in the Indian Financial Markets. Its funds are invested in asset classes in line with the IRDAI (Investment) Regulation and are exposed to various risks like market risk, credit risk, interest rate risk, liquidity risk and counterparty risk. The investment risks are systematically identified and systems & procedures have been implemented to address these risks so that not only the policyholders’ funds are protected but also their reasonable expectations are met.

Market Risk:

Market risk refers to the uncertainty of future earnings resulting from changes in interest rates, exchange rates and the market prices of securities. Corporation attempts to minimise the effects of market risk by primarily investing in securities that are part of major indices.

Market risk is further mitigated by matching assets and liabilities by type and duration and matching cash flows to the extent commercially practicable. The applicable investment strategy for each type of business is set out clearly to ensure that liabilities are appropriately matched by the nature and duration of assets.

Liquidity Risk:

Liquidity risk is the risk of not being able to make payments as and when they fall due, because of insufficient liquid assets in cash or cash equivalent, thereby requiring redemption of long term assets. Corporation faces limited liquidity risk due to the nature of its liabilities. Corporation manages liquidity risk by monitoring the asset-liability cash flow matching positions on Quarterly and yearly basis. The cash flow matching is also analysed under various stress scenarios. LIC has Board approved Asset Liability Management policy.

Credit risk:

Credit risk is the risk resulting from the failure by either party to perform timely their contractual obligations or the deterioration in the credit profile.

Corporation faces limited credit risk as major portion of the investments are made in Govt. securities. Credit risk related to investment in other debt securities is mitigated by,

(i) restricting investments primarily to securities rated AA or AAA and above by domestic rating agencies and

(ii) monitoring the quarterly performances of our portfolio companies, their ratings and their track record of servicing of their obligations on the due dates.

Insurance risk can occur as a result of adverse experience in claims, morbidity, mortality, withdrawals, expenses, taxation treatment and other assumptions that are estimated within pricing and valuation calculations of the product. This includes underwriting risk. The premium and reserve risks are significant components of the underwriting risk. The Corporation reinsures its higher Sum Assured business and has treaties with reinsurers for specific products.

Operational Risk:

Corporation is exposed to various types of operational risk, which arise from various sources including inadequate record keeping, failures of systems & established controls, employee error, and internal/external frauds. Corporation manages to minimize the impact of the operational risks by regular monitoring of processes, systems & procedures, implementation of controls for frauds. Cyber security risks are monitored by Cyber Security Desk. Reputational risks are identified by the Corporation and its impact is monitored systematically.

Compliance Risks:

To mitigate these risks, the Corporation has robust internal controls, conducts regular audits, provides ethics training, promotes whistle blowing, and creates a culture of transparency and accountability. Additionally, the Corporation emphasizes on updating itself on relevant laws and regulations, conduction of due diligence wherever necessary and implementing technology solutions for managing these risks effectively.

Business Continuity Measures (BCM):

The Corporation has Board approved plan for business continuity. Business interruption risk forms an integral part of operational risk. The Corporation may face a host of disasters that range from minor to catastrophic which can impact day-to-day operations.

Business Continuity Plan provides overall guidelines to implement and manage the Business Continuity framework which provides instructions / guidelines to respond to disaster situation and also includes measures for - safety of human life and minimum down time. The continuity plan has been formalized to provide measures to be taken to respond to events as natural disasters, pandemic and technical disruptions etc.

Disaster recovery site has been set up to carry out critical processes in adverse scenario. Business continuity drills are carried on a regular basis for critical processes and also to manage business interruption risks.

As a part of Business Continuity Plan, Corporation has formed Crisis Management Teams at Central Office and all the eight Zonal Offices of the Corporation, mainly to respond to any disastrous situation. Emergency Response Teams are also formed in all offices of the Corporation to oversee the implementation of guidelines issued by Crisis Management Team during disaster

9. OPERATIONS IN OTHER COUNTRIES

The Corporation has overseas branch offices in three countries viz. United Kingdom., Fiji and Mauritius. The Corporation does not have any country risk as the policies in these countries are offered in the respective country currency only and income received in the country is also invested in the same country except a meager investment by United Kingdom branch office in equities of non United Kingdom Entities.

13. THE MANAGEMENT HEREBY GIVES A RESPONSIBILITY STATEMENT INDICATING THAT:-

a. In the preparation of financial statements, the applicable accounting standards, principles and policies have been followed along with proper explanations relating to material departures, if any;

b. The management has adopted accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the Corporation at the end of the Financial Year and of Surplus/ profit of the Corporation for the year;

c. The management has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the applicable provisions of the Insurance Act, 1938 (4 of 1938)/LIC Act,1956, as amended by the Insurance Laws (Amendment) Act 2015, for safeguarding the assets of the Corporation and for preventing and detecting fraud and other irregularities;

d. The Management has prepared the financial statements on a going concern basis;

e. The Management has ensured that an Internal Audit System commensurate with the size of the organization and nature of business exists and is operating effectively.

14. A SCHEDULE OF PAYMENTS, WHICH HAvE BEEN MADE TO INDIvIDUALS, FIRMS, COMPANIES AND ORGANIzATIONS,

IN WHICH DIRECTORS OF THE INSURER ARE INTERESTED, IS AS UNDER:-

The details of payments made during the year to individuals, firms, companies and organizations in which directors of the

Corporation are interested are given in note no. 27 (Related Party Disclosure) of Notes to Accounts.

CHAIRPERSON MANAGING DIRECTOR

APPOINTED ACTUARY CHIEF FINANCIAL OFFICER

& executive DIRECTOR (ACTL)

executive DIRECTOR (INv FO) & CIO Place: Mumbai Date: 27.05.2024

---

Mar 31, 2023

1.	Contingent Liabilities: ('' in Lakhs)
	S. No.	Particulars	As at 31.03.2023		As at 31.03.2022
	a.	Partly paid-up investments	60,496.10		60,496.10
	b.	Claims against the Corporation not acknowledged as Debts	1,836.30		952.67
	c.	Underwriting commitments outstanding	Nil		Nil
	d.	Guarantees given by or on behalf of the Corporation	8.46		7.96
	e.	Statutory demands/liabilities in dispute, not provided for	13,37,938.26		20,35,077.85*
	f.	Reinsurance obligations to the extent not provided for	Nil		Nil
	g.	Others:-
		Policy related claims under litigation	49,776.76		47,191.51
		Claims under litigation other than policy holders	94,774.66		25,903.42
2.	* This only includes tax litigations where the Corporation has filed an appeal before the Department of Income Tax against an adverse Order of an Assessing Officer. Commitments made and outstanding for loans, investments and fixed assets aggregate to as follows: ('' in Lakhs)
	Particulars			As at 31.03.2023		As at 31.03.2022
	Loans and Investment			14,54,505.93		6,97,436.01
	Fixed Assets			1,37,879.62		68,635.54

3. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation''s Life Insurance Business consists of linked and non-linked business under Individual and Group contracts. The non-linked business consists of Participating Assurance /Annuity / Pension policies and Non-participating Assurance / Annuity /Pension / Individual Health policies and Group policies written under non-participating assurances. The linked business consists of Non-participating Assurance / Pension / Individual Health policies with a very small proportion of linked assurance business written under Group contracts. Some of these policies have riders attached to them such as Critical Illness, Premium Waiver Benefit, Term Assurance and Accident Benefit including Accidental Death & Disability Benefit.

The Valuation liability for Individual and Group policies in our books as at 31st March, 2023, has been calculated actuarially for each policy by using Prospective Gross Premium Method of valuation. It is ensured that the reserve for each policy is at least equal to the Guaranteed Surrender Value or Special Surrender Value, whichever is higher. It is also ensured that negative reserve is set to zero while arriving at the reserve under a policy.

The unit liability in respect of Linked business is taken as the total Net Asset Value of the units as on the date of valuation. The non-unit liability under the linked business is calculated using the discounted cash flow method. The liabilities are calculated based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses, inflation and bonuses wherever applicable. The liability for Group Cash Accumulation schemes has been taken as the fund value of all such schemes as at 31st March, 2023. The liability in respect of One Year Renewable Group Term Assurance schemes has been arrived at as unearned risk premium based on period up to next Annual Renewal Date.

The valuation rates of interest used vary according to the type of plan and ranges from 5.20% to 7.30% p.a. depending on the nature and term of the underlying assets and liabilities. Bonus rate assumptions have been aligned to be consistent with the valuation rates of interest.

The mortality rates used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian individual Annuitant Mortality (2012-15) Ultimate Table adjusted to reflect expected experience and allowance for margin for any adverse deviation. Morbidity rates are based on the Critical Illness Base Table (CIBT 93, UK) /Reinsurer''s incidence rates, suitably modified for our use with margins included for prudence.

The expense assumption for valuation was arrived at either as a percentage of premiums or as per policy or a combination of these. The renewal per policy expenses used for valuing individual business varies according to the type of Plan and status of the policy and with an appropriate assumption for expense inflation. Renewal Premium related expenses in respect of individual business include GST on premium, wherever applicable, depending on the type of Plan.

While valuing Participating policies, the allowance for taxation and allocation of surplus to shareholders has been made by appropriately rating up future Reversionary Bonuses reserved for the balance duration of the contract.

Additionally, reserves have been provided for liability in respect of Premium Waiver Benefit, Double Accident Benefit including Permanent Disability Benefit, liability in respect of refundable Extra Premium and refundable Double Accident Benefit premium, revival of paid up policies, reinstatement of policies which have not acquired paid up value, immediate increase in expenses in case the office is closed for new business, AIDS/HIV, extra risk in respect of sub-standard lives, Incurred But Not Reported deaths (IBNR) and catastrophe. The assumptions used for arriving at the reserves for above mentioned items were determined based on a prudent assessment of the future experiences for the outstanding durations of the policies as at the date of valuation allowing for margin for any adverse deviation.

Further, in case of Linked Plans, where there is a guarantee at maturity, cost of such guarantee has been arrived at using stochastic methods. For Bima Account II, the cost of interest guarantee has been provided. For Plans where there are options which can be exercised by the policyholders, the most onerous option has been taken for valuing these options. Fund for Future Appropriations (FFA) has been provided for both Non Linked and Linked lines of business.

The Board of the Corporation has approved bifurcation of the Single fund into separate Par and Non-Par funds as mandated under Section 24 of LIC Act, 1956, and the Surplus Distribution Policy required under the amended Section 28 of LIC Act, 1956.

The Surplus Distribution Policy mandates the surplus distribution pattern for Par policies as 95:5 for the financial year 202122, 92.5:7.5 for the financial years 2022-23 and 2023-24, and 90:10 from financial year 2024-25 onwards and 0:100 for Non-Par policies from financial year 2021-22 onwards.

. Basis of allocation of investments and income thereon between Policyholders'' Account and Shareholders'' Account:

Income accruing on investments held in Policyholders'' and Shareholders'' funds have been taken to the respective funds.

The investible surplus, arising out of operations and income on Policyholders'' investments, was invested in Policyholders'' account. The accretions to shareholders'' fund during the year is invested in shareholders'' fund.

10) Expenses of Management:

The Expenses of Management are in accordance with the Regulation of IRDAI (Expenses of Management of Insurer transacting life insurance business) Regulation 2016 except in five segments (Previous year four segments), for which the Corporation shall seek forbearance from IRDAI. However, on an overall basis the actual expenses of management are within the limit of aggregate expenses allowable for all the segments.

11) Disclosure on presentation of segmental Reporting:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors'' report of insurance Companies) regulations 2002 (''the regulations'') read with Accounting Standard 17 on “segmental reporting” notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked and Capital Redemption and Annuity Certain Business (CRAC). The Corporation operates in various geographical segments. (Annexure -I on segmental reporting).

12) Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius and United Kingdom are of non integral nature. The Revenue Account items are translated at the average exchange rate and Balance Sheet items at closing rate. Revaluation Exchange difference which was charged to Revenue Account till the year i.e. 2010-11 is now accumulated in Foreign Exchange Reserve under Schedule 6A: Insurance Reserves (Policyholders) and Schedule 6: Reserve and surplus (shareholders).

13) The Micro, Small and Medium Enterprises Development Act, 2006:

According to information available with the management, on the basis of intimation received from suppliers, regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT), the corporation has amounts due to Micro and Small Enterprises under the said Act as follows:

16) Provision for free-look period:

Provision for free-look period as at year end March 31, 2023 and March 31, 2022 has been made on the basis of actual premium refunded during the month of April 2023 and April 2022 respectively. The provision is made with an assumption that all refund of premium during the month of April 2023 and April 2022 pertained to the policies completed on or before March 31, 2023 and March 31, 2022 respectively.

17) Progress of implementation of Ind AS:

The Corporation has floated the Request for Proposal (RFP) for engagement of Consultant for GAP analysis and its impact assessment on implementation of Ind AS and evaluation for the same is under process.

18) Security under debt extended to two companies amounting to ?62,860.00 Lakh is executed partially and is under due process(Previous Year under six companies, amounting to ? 2,69,656.00 lakh).

20) Provision for employee benefits:

During the year ended 31/03/2023, an estimated provision of ? 20,18,118.92 lakhs has been made for emplyee retirement benefits, which includes additional provision of ? 11,54,375.87 lakhs made due to the wage revision which became due with effect from 01/08/2022.

21) Capital Redemption and Annuity Certain (CRAC):

The Corporation was in the business of selling Capital Redemption and Annuity Certain (CRAC) policies. Hitherto, the Scheme was considered as non life business and neither included in the standalone financial results nor reported as a separate segment. Based on the opinion received from the expert advisory committee of ICAI, this scheme has now been included in the standalone audited financial results as on 31.03.2023.

22) Schemes managed by Corporation on behalf of GOI

The Corporation manages on behalf of the Government of India, five Individual Pension Plans, three Group Pension Plans and two Social Security Funds (referred as Managed Funds) on a “No Profit No Loss” basis with neither any risk nor any reward accruing to the Corporation from such activities and hence the Standalone accounts of the Corporation do not include the operating results and financial position of these managed funds.

23) Accretion on the Income on Available Solvency Margin

The Corporation has changed its accounting policy during the current year and accordingly has transferred an amount of Rs.27,24,075.30 lakhs (Net of Tax) pertaining to the accretion on the Available Solvency Margin from Non Par to Shareholder''s Account due to which the Profit for the financial year ended as on 31/03/2023 has increased to that extent. The said amount comprises of Rs.7,29,915.46 lakhs (Net of Tax) of quarter ended 31/03/2023, Rs. 15,39,928.96 lakhs (Net of Tax) for 9 months ended 31/12/2022, and Rs. 4,54,230.88 lakhs (Net of Tax) of quarter ended 31/03/2022.

24) Tax on Surplus:

Pursuant to the bifurcation of Life Fund into Participating Fund and Non-Participating Fund and further based on the review of income tax laws as applicable, the provision for income tax for Financial Year 2022-23, in respect of Participating line of business, has been made on the shareholders share in the “Actuarial Valuation Surplus” as against total “Actuarial Valuation Surplus”. Due to this change, there is a reduction in the provision for income tax for the F.Y. 2022-23 by Rs. 7,18,599.85 lakhs.

25) Impairment of Investments:

The impairment in value of investments other than temporary diminution has been assessed for the period and accordingly impairment provisions have been provided.

Provision/(reversal) for impairment loss recognized in the Revenue Account under the head Provision for diminution in the value of investments (net).

32) Basis of revaluation of investment property:

Revaluation of investment (rented out) properties is being carried out once in three years as per IRDAI guidelines. The revaluation of properties has been carried out in the financial year 2022-23. The basis adopted for revaluation of property is as under:

• The valuation of investment property has been carried out by Rent Capitalization Method considering the market rent.

• Revaluation of investment properties having land alone without any building/structure has been revalued as per current market value.

• The Revaluation Reserve as at March 31,2023 amounts to Rs. 14,83,523.15 Lakhs and as at March 31,2022 amounts to Rs. 12,30,857.61 lakhs.

33) The Board of Directors in its meeting held on 24th May 2023, have proposed Dividend of Rs. 3.00 per equity share (face value of Rs.10/- each) for the year ended March 31, 2023, which is subject to approval of shareholders in the Annual General Meeting.

34) Transfer of unclaimed dividend and corresponding shares to Investor Education and Protection Fund:

i) Details regarding Unclaimed Dividend: The Corporation had made payment of final dividend to the members of the Corporation for the financial year 2021-22 on October 12, 2022, through direct credit to bank accounts whose bank details were updated with Depository Participants and demand drafts were issued to those shareholders whose bank details were not updated with Depository Participants.

In terms of Section 28C of Life Insurance Corporation Act,1956, the unpaid/unclaimed dividend for the FY 2021-22 was transferred to Unpaid/Unclaimed Dividend Account and the list of members whose dividend are lying in unpaid/ unclaimed dividend account is available on the website of the Corporation.

ii) Transfer of unclaimed dividend and corresponding shares to Investor Education and Protection Fund: Section 28 C(5) of the Life Insurance Corporation Act,1956 provides that the amount remaining unclaimed and unpaid for a period of seven years from the date it becomes due for payment in Unpaid Dividend Account shall be transferred to the Investor Education and Protection Fund (IEPF) established under sub-section (1) of Section 125 of Companies Act, 2013.

In terms of Section 28 C(6) of Life Insurance Corporation Act, 1956, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Corporation in the name of the Investor Education and Protection Fund.

35) Disclosure requirements as per Corporate Governance Guidelinesi) A description of the risk management architecture:

LIC has robust Enterprise Risk Management (ERM) framework to conduct business in an orderly fashion taking into account the risks faced by the Corporation and controlling its business effectively with defined responsibilities and adequate risk management procedures.

Board of Directors provide the overall guidance on Risk Management function which includes providing necessary oversight on key risks and measures, approving the Enterprise Risk Management Policy, Risk Appetite statement, Asset Liability Management (ALM) Policy and Business Continuity Plan (BCP) of the Corporation on an annual basis.

In line with the IRDAI Guidelines, Corporation has constituted the Risk Management Committee of the Board (RMCB). The RMCB looks after the risk management governance structure, reviews the risk management framework, risk appetite and the risk mitigation plans for significant risks, identifies strategic risks emanating from changes in business environment and regulations, oversees the compliance to regulatory requirements, all matters related to Asset Liability Management, IT Security policy on annual basis, reviews regular updates on business continuity in line with the Corporation''s Business Continuity Plan, solvency position of the Corporation, fraud monitoring, etc. on regular basis. Further, all important matters which, in the view of the RMCB, require further strategic intervention from the Board are brought to its knowledge in its meeting on a periodic basis.

An internal independent Committee, named as Committee of Executives on Risk Management and Asset Liability Management Committee (CERM & ALCO) has been constituted with Heads of key functional departments. Chief Risk Officer (CRO) acts as the custodian of Enterprise Risk Management framework and guides the implementation of the Enterprise Risk Management. Recommendations of the Committee of Executives on Risk Management & Asset Liability Management are reported to RMCB by the CRO. CERM & ALCO supports the RMCB by supervising major functions like establishing Enterprise Risk Management Policy, ALM Policy, Risk Appetite Statement, MIS for risk reporting/risk control, key risks arising from strategic initiatives and changes in business environment or regulations, risk assessment highlighting significant risks and risk mitigation plans thereof, review of operating risk environment including Business Continuity Plan, review of solvency position of the Corporation on a regular basis, review of risk related to IT security and Fraud Monitoring. A consolidated report on various issues discussed by the CERM & ALCO and action taken thereon are reported to RMCB on quarterly basis.

Information Security Steering Committee (ISSC) consisting of heads of departments of Central office, Chief Risk Officer (CRO) and Chief Information Security Officer (CISO) oversees all Information and cyber security related policies and procedures.

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Mar 31, 2022

1.	Contingent Liabilities:			('' in Lakhs
	S.	Particulars	As at	As at
	No.		31.03.2022	31.03.2021
	a.	Partly paid-up investments	60496.10	233695.98
	b.	Claims against the Corporation not acknowledged as Debts	952.67	1389.49
	c.	Underwriting commitments outstanding	Nil	Nil
	d.	Guarantees given by or on behalf of the Corporation	7.96	8.12
	e.	Statutory demands/liabilities in dispute, not provided for *	2035077.85	2476139.44
	f.	Reinsurance obligations to the extent not provided for	Nil	Nil
	g.	Others:-
		Policy related claims under litigation	47191.51	37744.25
		Claims under litigation other than policy holders	25903.42	10068.26

*This only includes tax litigations where the Corporation has filed an appeal before the Department of Income Tax against an adverse Order of an Assessing Officer.

2. Commitments made and outstanding for loans, investments and fixed assets aggregate to as follows:

('' in Lakhs
Particulars	As at 31.03.2022	As at 31.03.2021
Loans and Investment	697436.01	1066824.20
Fixed Assets	68635.54	51049.78

3. Actuarial Assumptions for valuation of Policy liabilities:

The Corporation''s Life Insurance Business consists of linked and non-linked business under Individual and Group contracts. The non-linked business consists of Participating Assurance/Annuity/Pension policies and Nonparticipating Assurance/ Annuity/Pension/Individual Health policies with Group policies written under nonparticipating assurances.The linked business consists of Non-participating Assurance/Pension/Individual Health policies with a very small proportion of linked assurance business written under Group contracts. Some of these policies have riders attached to them such as Critical Illness, Premium Waiver Benefit, Term Assurance and Accident Benefit, including Accidental Death & Disability Benefit.

The Linked Non-Par Business consists of:

• 4 funds namely, Bond Fund, Income Fund, Balanced Fund and Growth Fund for each of Future Plus Plan and Gratuity Plus Plan (Group Business)

• 4 funds namely, Bond Fund, Secured Fund, Balanced Fund and Growth Fund for the Plans Jeevan Plus, Money Plus, Market Plus, Fortune Plus, Profit Plus, Money Plus-I, Market Plus-I, Child Fortune Plus, Jeevan Sathi Plus, Endowment Plus, Nivesh Plus & SIIP, New Endowment Plus and New Endowment Plus Modified version.

• Health Plus fund for Health Plus Plan and Health Protection Plus fund for Health Protection Plus Plan

• Mixed Fund and Debt Fund for Pension Plus Plan and Flexi Plus Plan.

The Valuation liability for Individual and Group policies in our books as at March 31, 2022 has been calculated actuarially for each policy by using prospective gross premium method of valuation. It is ensured that the reserve for each policy is at least equal to the guaranteed surrender value or special surrender value, whichever is higher. It is also ensured that negative reserve is set to zero while arriving at the reserve under a policy. The unit liability in respect of Linked business is taken as the total Net Asset Value of the units as on the date of valuation. The non-unit liability under the linked business is calculated using the discounted cash flow method. The liabilities are calculated based on the valuation assumptions for interest, mortality, morbidity, withdrawal, expenses, inflation and bonuses wherever applicable. The liability for Group Cash Accumulation schemes has been taken as the fund value of all such schemes as at March 31, 2022. The liability in respect of Group Insurance schemes has been arrived at as unearned risk premium based on period up to next Annual Renewal Date.

The valuation rates of interest used vary according to the type of Plan and ranges from 5.20% to 7.75% p.a. depending on the nature and term of the underlying assets and liabilities. Bonus rate assumptions have been aligned to be consistent with the valuation rates of interest. The mortality rates used are based on the published Indian Assured Lives Mortality (2012-14) Ultimate Table and Indian Individual Annuitant Mortality (2012-15) Ultimate Table adjusted to reflect expected experience and allowance for margin for any adverse deviation. Morbidity rates are based on the Critical Illness Base Table (CIBT 93 UK) /Reinsurer''s incidence rates, suitably modified for our use with margins included for prudence.

The expense assumption for valuation was arrived at either as a percentage of premiums or as per policy or a combination of these. The renewal per policy expenses used for valuing individual business vary according to the type of Plan and status of the policy and with an appropriate assumption for expense inflation. Renewal Premium related expenses in respect of individual business include GST on premium, wherever applicable, depending on the type of Plan.

While valuing Participating policies, the allowance for taxation and allocation of surplus to shareholders has been made by appropriately rating up future Reversionary Bonuses reserved for the balance duration of the contract. Additionally, reserves have been provided for liability in respect of Premium Waiver Benefit, Double Accident Benefit including Permanent Disability Benefit, liability in respect of refundable Extra Premium and refundable Double Accident Benefit premium, revival of paid up policies, reinstatement of policies which have not acquired paid up value, immediate increase in expenses in case the office is closed for new business, additional death strain due to COVID-19 pandemic, AIDS/HIV, extra risk in respect of sub-standard lives, Incurred But Not Reported deaths (IBNR), catastrophe and improvement in mortality. The assumptions used for arriving at the reserves for above mentioned items were determined based on a prudent assessment of the future experiences for the outstanding durations of the policies as at the date of valuation allowing for margin for any adverse deviation. Further, in case of Linked Plans, where there is a guarantee at maturity, cost of such guarantee has been arrived at using stochastic methods. For Bima Account II, the cost of interest guarantee has been provided. For Plans where there are options which can be exercised by the policyholders, the most onerous option has been taken for valuing these options. Fund for Future Appropriations (FFA) has been provided for both Non Linked and Linked lines of business.

The Board of the Corporation has approved bifurcation of the Single fund into separate Par and Non-Par funds as mandated under Section 24 of LIC Act, 1956 and the Surplus Distribution Policy required under the amended Section 28 of LIC Act, 1956. The Surplus Distribution Policy mandates the surplus distribution pattern for Par policies as 95:5 for the financial year 2021-22 92.5:7.5 for the financial years 2022-23 and 2023-24 and 90:10 from financial year 2024-25 onwards and 0:100 for Non-Par policies from financial year 2021-22 onwards.

4. Basis of allocation of investments and income thereon between Policyholders'' Account and Shareholders'' Account:

Income accruing on investments held in Policyholders'' and Shareholders'' funds have been taken to the respective funds.

The investible surplus, arising out of operations and income on Policyholders'' investments, was invested in Policyholders'' account. The accretions to shareholders'' fund during the year is invested in shareholders'' fund.

5. Prior Period Items:

The income includes following prior period items:		('' in Lakhs
Particulars	For the year ended	For the year ended
	March 31, 2022	March 31, 2021
Transfer of LIC''s Pensioners purchase price from Superannuation to Annuity	425519.16	277367.91
Total	425519.16	277367.91

10) Expenses of Management:

The Expenses of Management are in accordance with the Regulation of IRDAI (Expenses of Management of Insurer transacting life insurance business) Regulation 2016 except in four segments, for which the Corporation shall seek forbearance from IRDAI. However on an overall basis the actual expenses of management are within the limit of aggregate expenses allowable for all the segments.

11) Disclosure on presentation of segmental Reporting:

Based on the primary segments identified under IRDA (preparation of Financial statements and auditors'' report of insurance Companies) regulations 2002 (''the regulations'') read with Accounting Standard 17 on "segmental reporting" notified under section 133 of the Companies act 2013 and rules there under, the Corporation has classified and disclosed segmental information separately for shareholders and policyholders. Accordingly the Corporation has prepared the Revenue Account and the Balance Sheet for the primary business segments namely Participating Life Individual, Participating Pension Individual, Participating Annuity Individual, Non Participating Life (Individual & Group), Non Participating Pension (Individual & Group), Non Participating Annuity Individual, Non Participating Variable individual, Non Participating Health individual, Non Participating Unit Linked. The Corporation operates in various geographical segments. (Annexure -I on segmental reporting).

12) Foreign Exchange Reserve:

Operations carried out in Fiji, Mauritius and United Kingdom are of non integral nature. The Revenue Account items are translated at the average exchange rate and Balance Sheet items at closing rate. Revaluation Exchange difference which was charged to Revenue Account till the year i.e. 2010-11 is now accumulated in Foreign Exchange Reserve under Schedule 6A: Insurance Reserves (Policyholders) and Schedule 6: Reserve and surplus (shareholders).

16) Provision for free-look period:

Provision for free-look period as at year end March 31, 2022 and March 31, 2021 has been made on the basis of actual premium refunded during the month of April 2022 and April 2021 respectively. The provision is made with an assumption that all refund ofpremium during the month ofApril 2022 and April 2021 pertained to the policies completed on or before March 31, 2022 and March 31, 2021 respectively.

17) Progress of implementation of Ind AS:

As per the initial roadmap given by Ministry of Corporate Affairs (MCA), insurance companies were required to implement Ind AS from April 2018. Insurance Regulatory & Development Authority of India (IRDAI) deferred the implementation of Ind AS since International Accounting Standard Board (IASB) had taken a considered view to amend IFRS 17. The IASB has amended IFRS 17 and made it effective from annual reporting periods

beginning on or after 1^st January 2023. Exposure Draft of amendments to Ind AS 117 (Insurance Contracts), consistent with IFRS 17 was issued by the Accounting Standard Board (ASB) of ICAI on 24^th December, 2020. On finalization, Ind AS 117 will be notified by MCA.

Core teams to ascertain and evaluate the requirements of new Accounting Standards, for implementation of Ind AS are formed in concerned departments. An integral Actuarial software system "prophet" capable of performing actuarial calculations required under IFRS 17 (Ind AS 117) was purchased in March 2021. All the products have been integrated into prophet software system required for valuation as at 31^st March, 2022.

We await guidelines from IRDAI and other professional bodies on implementation of these standards. Appropriate changes in the system and processes will be carried out once these guidelines are in place.

18) Security under debt extended to six companies amounting to '' 269656.00 Lakh is executed partially and is under due process (Previous Year under seven companies, amounting to '' 300583 lakh).

19) The COVID-19 is an ongoing global pandemic as declared by World Health Organization on March 11 2020. Its spread across the globe including India has resulted in significant impact on global and India''s economic environment. The Corporation since the onset of pandemic has experienced increase in death claims including claims arising due to COVID 19 pandemic. Accordingly, the additional death strain on account of COVID 19 pandemic and its impact on the policy liabilities and solvency is closely monitored and considered in reserving. Available information in public domain does not conclusively suggest need for any long term change in the expected future mortality experience on account of COVID 19. It is however, considered prudent that a separate reserve is kept as COVID-19 reserve without need for changing long term mortality assumptions. Considering the national statistics as available from Government of India statistical sources on Indian Population, duly adjusted and applied on the Corporation''s data and experience and after adding margin for prudence, a separate reserve for COVID 19 related deaths has been estimated and provided for under both individual and group insurance lines of businesses.

This COVID 19 reserve is in addition to the long term mortality reserve provided each year while determining and providing for the policy liabilities

20) Issue and allotment of 1000 lakhs Equity Shares of Rs. 10 each in terms of provisions of Section 5(2) of LIC Act 1956 as amended, against Paid-up equity Capital provided by Central Government from time to time, 6224997701 bonus shares of Rs. 10 each were issued and allotted against the available free Reserves, in terms of provisions of section 5(4) of LIC Act 1956 as amended thus the total issued and subscribed equity capital of the Corporation being Rs. 632499.77 Lakhs.

22) The Finance Bill 2021 proposed various amendments to the LIC Act, 1956 (''the Act''). These amendments came into effect from 30th June, 2021 vide Gazette Notification ref. S. O. 2616(e) dated 29th June, 2021. In exercise of the mandate given under section 24 of the amended LIC Act, 1956 and in discharge of this mandate, the Board has approved in principle, in its meeting held on 24.08.2021 bifurcation of Single/Unified Policy Holder fund into Participating Policyholders'' fund and Non-Participating Policyholders'' fund w.e.f 30th September, 2021 (applicability as per the Act is w.e.f. 1st April 2022) taking into account the interest of the various stakeholders including maintaining Policy Holder Reasonable Expectations (PRE).

The policy liability has been aligned with the line of business wise actuarially assessed liability (Life as well as P&GS including Par and Non par) as at 30.09.2021. The Board has decided to keep the available solvency margin as at 31st March, 2021 and the corresponding assets in the Non-Par fund which would be available to meet the solvency requirement of all the policyholders of the Corporation.

In order to meet the solvency requirement of all the stakeholders, the Corporation has adopted rational approach for realignment of assets and considered those assets which are easily marketable, have good market value and appreciation over their book value and long term in nature with liquidity and lower risk.

23) Impairment of Investments:

The impairment in value of investments other than temporary diminution has been assessed for the period and accordingly impairment provisions have been provided.

Provision/(reversal) for impairment loss recognized in the Revenue Account under the head Provision for diminution in the value of investments (net).

Note -1. The figures for ''provisions for doubtful investments and other provisions'' in FY2020 have been recast due to regrouping of funded folios under Investments (earlier shown under other advances). The amount of provision on funded folios pertaining to FY2020 was reversed to Interest account as per the prevailing accounting practice. The provision for the year FY2021 has been adjusted one time against Interest for proper presentation in Revenue Account for FY2021.

2. The assets shown above are presented under various categories in accordance with the formats prescribed by IRDA in Schedule 8A, 8B and 9.

29) Wage Revision:

Wage revision of the employees of the Corporation is done every five years and the last wage revision, which was Settled in Current Financial year 2021-22 However, Provision for the Same have been made on the estimated cueis during all relevant financial year. due on August 01 2017.

30) Retention of earnings:

Government''s share of surplus (including surplus of CRAC business of '' 258.18 lakhs) for the F.Y. 202021 amounting to '' 290314.86 lakhs have been retained as reserves, in accordance with approval from Government of India and IRDAI.

31) The Board of Directors in its meeting held on 30^th May 2022 have proposed Dividend of '' 1.50 per equity Share with face value of '' 10/- each for the Year ended March 31, 2022 which is subject to approval of Shareholders in AGM.

32) Disclosure requirements as per Corporate Governance Guidelinesi) A description of the risk management architecture:

Risk management is defined as the process under which Corporation addresses Investment risks associated with the corporation''s financial assets under its management by identifying, measuring and mitigating such risks. Risk Management encompasses understanding of all the factors and the extent to which they can be threats to success. The process will also endeavor to bring about the Risk culture in the organization so that the employees feel the importance of putting Risk management system in place and each employee involves himself in appropriately addressing the concerned risks.

Board of Directors provide the overall guidance on Risk Management function; which includes providing necessary oversight on key risks and measures, approving the Risk Management Policy, Risk Appetite statement, ALM Policy and Business Continuity Plan of the Corporation on an annual basis.

In line with the IRDAI Guidelines, Corporation has constituted the Risk Management Committee of the Board (RMCB). The RMCB looks after the risk management governance structure, reviews the risk management framework, risk appetite and the risk mitigation plans for significant risks, identifies strategic risks emanating from changes in business environment and regulations, oversees the compliance to regulatory requirements, all matters related to Asset Liability Management, IT Security

policy for investment functions on annual basis, reviews regular updates on business continuity in line with the Corporation''s Business Continuity Plan, solvency position of the Corporation, fraud monitoring, etc. on regular basis. Further, all important matters which, in the view of the RMCB, require further strategic intervention from the Board are brought to its knowledge in its meeting on a periodic basis.

An internal independent Committee, named as Committee of Executives on Risk Management (CERM) has been constituted consisting of Heads from all the three sections of Investment Department i.e. Front office (CIO), Mid-office (CRO), Back office and Actuarial Department. CERM monitors the implementation of Risk Management policy and ALM policy for the Investment Department.

Besides, CERM supports the RMCB by supervising some major functions, like, establishing Risk Management Policies, MIS for risk reporting/risk control applicable to Investment Departments, frame accountability and authority for risk management, report to the Risk Management Committee of the Board about key risks arising from strategic initiatives and changes in business environment or regulations, provide risk assessment review reports highlighting significant risks and risk mitigation plans thereof, review of operating risk environment including Business Continuity Plan in line with Corporation''s Business Continuity Plan, review the solvency position of the Corporation on a regular basis, review of risk related to IT security and any other issues related to IT and reviews the Fraud Monitoring Report.

Recommendations of the CERM are reported to the RMCB. A consolidated report on various issues discussed by the Committee of Executives on Risk Management and action taken thereon along with frequency of the meeting are reported to the RMCB on quarterly basis.

Heads of Investment-Operations (Front office), Monitoring & Accounting (Back-Office) and Risk Management (Mid-Office) functions are responsible for implementation of the sound Risk Management System as may be applicable to their respective areas of functioning as well as be responsible for coordinating with the other sections. They are also responsible for maintaining a sound system of internal control that supports the achievement of the objectives and policies as enumerated in the Corporation''s Investment Policy.

The risk control framework is specified, monitored and controlled though Policies and procedures, Systems and Organization.

Every Department maintains a risk register, where all the potential risk areas and control framework are listed. The risk registers for all the departments are reviewed on a half yearly basis by the Enterprise Risk Management (ERM) Cell of the Investment Risk Management (INVR) Department.

LIC has Information Security Steering Committee (ISSC) consisting of Managing Director, some heads of departments at central office and Chief Information Security Officer (CISO). It oversees all information and cyber security related policies and procedures. Minutes of the ISSC meetings are put up to Risk Management Committee (RMC) for information. At present, heads of following departments at central office are represented in ISSC: CRM, Engineering, IT-SD (also designated as Chief Information Officer), IT-BPR, RMR (also designated as Chief Risk Officer), P&GS, E&OS, M&A and F&A (also designated as Chief Finance Officer).

The data security systems are in place and are reviewed frequently to prevent frauds.